Two months ago, Netflix announced that it was separating its DVD-by-mail and online streaming options, to much consumer outrage. Customers who wanted both services would have to pay more (a rule that has now gone into effect). Finally responding to the criticism, CEO Reed Hastings has apologized in a new post on the company’s blog.
“I messed up,” Hastings wrote. “I owe everyone an explanation.” In his attempt to change with the times and not be left behind by failing to jump on the streaming bandwagon, he failed to communicate with his customers. “I need to be extra-communicative,” he continued. “This is the key thing I got wrong.”
The post is rather lengthy, but the basic gist is that Netflix will now be separated into two companies with separate CEOs. The streaming side will continue to be called Netflix, while the DVD-by-mail service will be renamed Qwikster. The companies will have different websites, requiring you to login separately and manage your account and billing information separately. If you rate titles, you must do so separately on each site.
Two months ago when the outrage began, I thought everybody was overreacting. In my opinion, Netflix was still a majorly good deal – and since I mostly use DVDs and not streaming (I don’t have a device to stream to my giant TV), I simply dropped the streaming service and paid even less for Netflix.
But now I’m saying WTF with everyone else. First off, Qwikster is the stupidest name I’ve ever heard.
Second, all these changes benefit the company while completely ignoring the consumer. “We realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently,” Hastings wrote on the blog.
Well, great. Somebody at your company gets promoted to CEO of Qwikster, and things get easier for you while they only get harder for us. If I ever decide to get streaming again, I’ll have to sign up with a new company. If I’ve rated 2,000 titles on the DVD side, I’ll have to completely start over with streaming. I can’t search for a DVD on one website and see all the viewing options available to me.
What do you guys think of the new Netflix plan?
